Is stock taken for own use priced at Retail Value, (as in the UK)...??

pod

In the UK if a trader takes business stock for his own use then he has to charge himself full retail value for the stock, not cost price.

Does anyone know how it works in Ireland?

If a trader takes stock for his own personal use, does he also charge himself full retail value (not cost price)?

gerrycollins

pod wrote:

In the UK if a trader takes business stock for his own use then he has to charge himself full retail value for the stock, not cost price.

Does anyone know how it works in Ireland?

If a trader takes stock for his own personal use, does he also charge himself full retail value (not cost price)?

it depends on how accurate you want your books to be at the end of the year as to charge one self cost price would saturate you profit margin where as to charge retail price would keep profit margin more accurate and thus keeping the books in line,
theoritical at the end of the day trader is only paying cost price and giving the profit back to him/herself but it help to avoid confusion with books at end of year plus you have to take into consideration any VAT
it doesnt matter what country its just good practise.

pod

In the UK you *have* to charge any stock taken for personal use at retail price. You don't have the option of taking stock at cost price.

Is there any definitive ruling concerning this in Ireland? As to whether it has to be charged at retail price?

gerrycollins

as for a definite ruling im not so sure other than Vat been paid on items sold,

ronbyrne2005

if you just take it from stock which is valued at cost its fine i think.theres no actually sale

onedmc

I dont get that UK ruling, I can sell products in my shop for any price I want to. I often sell stuff to my family for cost + VAT.

Selling it to mayself and other employees might be considered a benifit in kind but I can't see how the revenue (even in the UK) has any chance of implementing it.

There is certainly no revenue statment on it but as the said earlier it may be best practice and accountants in the UK are a little more strick on this then in ireland.

pod

onedmc wrote:

I dont get that UK ruling, I can sell products in my shop for any price I want to.

I think what the UK ruling means is that whatever you would normally retail an item at, then that is the price you must charge yourself if you take the item from stock for your own personal use.

So whatever you normally retail an item at, whether it is cheaper or more expensive than another retailer, then you must charge yourself this price.

So is there no ruling like this in Ireland? If you take something from stock for personal use do you simply charge yourself cost price?

gerrycollins

no there is no ruling you dont even have to sell it to yourself if you dont want to take it but it will throw your books out and VAT issues plus you are paying yourself (in theory) for the item so it doesnt matter what way you do it just IMO it just best practise to sell to yourself at retail price depending on what way you want your books to turn out at the end of the year

Pythia

pod wrote:

I think what the UK ruling means is that whatever you would normally retail an item at, then that is the price you must charge yourself if you take the item from stock for your own personal use.

So whatever you normally retail an item at, whether it is cheaper or more expensive than another retailer, then you must charge yourself this price.

So is there no ruling like this in Ireland? If you take something from stock for personal use do you simply charge yourself cost price?

I wonder could you have a one day sale the day you decide to take that item?

jimmycrackcorm

Where is this ruling? I find it very strange as you can effectively have a quick sale and sell it to yourself. what about dunnes and the like who apply staff discounts for example? What about shop-solied items - they can be sold below costs.

I do know that if you want to write off lots of stock you have to ensure that it is revenue approved via your accountant as that has implications on profits and tax. Realistically the only issue with selling yourself stock at a lower non-retail price is the benefit in kind. e.g. If I am a motor dealer and decide to sell myself a top of the range Mercedes for €10k I don't think the revenue will be impressed.

Laguna

Pythia wrote:

I wonder could you have a one day sale the day you decide to take that item?

No, because when something is sold in a sale it's not as if its stock value is lowered for the day, it's seen as a loss, for example if something normally retails at €14.99 but for a one day sale is reduced to €4.99, the stock value will remain at its previous value of €14.99, it'll just be regarded as having been sold at a loss..

As regards to shop soiled items, they can be sold at a loss as in most retail stores when something is damaged, the entire value of the item is written off as a loss and anything recouped through its sale as a damaged/soiled item is not counted against the original item (if you know what I mean, the cash from the sale of the damaged item is just another miscellaneous income for the shop).

Staff discounts are a different kettle of fish altogether, companies account for this and forecast lost revenue from stock sold at a slightly lower price through projected staff sales..

lomb

I find the whole thing mad. just take it and if anyone asks tell them it must have been stolen which is probably true to some extent:D